ELWOOD — Elwood has the power to implement a countywide income tax increase with a single vote, but the City Council decided to table that vote during Monday’s meeting.

In response to House Bill 1001 and reduced tax revenue projections, Anderson City Council approved a resolution to raise the county option income tax, or COIT, to 1.5 percent during its Aug. 14 meeting.

The resolution would eliminate the current county economic development tax, CEDIT, of .25 percent. It adds .25 percent to the homestead credit percentage and .25 percent in a COIT for public safety.

Anderson alone could not increase the countywide tax. Elwood would need to vote in favor of the measure for it to pass due to its status as the second largest community in the county.

Due to decreased property tax revenue, Elwood must cut $703,912 from its 2009 budget and another $1,038,320 in 2010.

According to Jim Steele, the financial consultant who pitched the COIT idea to Anderson, Elwood would gain $368,216 in 2009 in revenue from COIT.

Revenue from COIT would be placed into the general fund monthly and designated for public safety costs including police and fire salaries and equipment.

A public hearing was held in Elwood Monday night to provide residents a chance to weigh in on the issue, and those attending pulled no punches in questioning the increase.

Elwood resident Bobbi Taylor stood before the council with a simple statement. “I’m dead-set against it.”

“We are not Anderson. We are not Kokomo. We’re Elwood. We can’t afford a tax increase,” Taylor said.

According to Mayor Merrill Taylor, a person earning $40,000 a year would pay an extra $100 annually if the COIT was passed.

“That’s $1.93 a week,” he said.

Elwood resident Lynn King immediately objected to the statement. “There’s people in this town, including myself, who cannot stand to lose another $1.93 a week.”

Councilman David Savage said the city could not afford to vote down the COIT. “Without any tax increase, we’re not going to gain anything, we’re losing. I think Elwood citizens need public safety and we need this tax.”

Councilman Brian Courtney said he recently reviewed the local arrest log in the newspaper and noticed an increase over prior years, saying that public safety was invaluable to the community. “I don’t want another tax either but when I make a call to 911, somebody better be there.”

Councilman Jack Powell argued against COIT, saying the money may be earmarked for public safety, but this did not represent additional public safety services. “It’s not a guarantee that this will increase the budget for public safety.”

Since current public safety costs are paid out of the general fund, Powell argued that city officials could take money previously allotted for public safety out of the fund, replace it with COIT money, and keep the public safety budget the same.

Courtney said he’d be against any vote that did not stipulate that all COIT money would be spent on public safety.

If Elwood votes in favor of the COIT, it can later establish a resolution dictating that all funds from the tax will be used for public safety and that the original public safety budget would remain in the general fund as well.

“I don’t believe we’ll take money out of public safety,” Mayor Taylor said.

Powell suggested that the council table the vote and said council members needed “more chance to do our homework.”

If Elwood approves the COIT, the tax would be implemented on Oct. 1 and Madison County taxpayers would immediately begin seeing deductions in their paychecks.

A meeting has been scheduled for Monday, Sept. 15, at 6:30 p.m. at Elwood City Hall. The meeting will continue in its public hearing format and residents are welcome to attend and voice their opinions, Powell said.

Elwood’s council must vote on the measure by Sept. 16 or its inaction will count as a “no” vote and a new resolution will need to be proposed by Anderson or another Madison County community.

Greg Graham, chairman of the Anderson Board of Public Works, appeared before the council on behalf of Anderson Mayor Kris Ockomon and urged the council to vote in favor of the measure. “I don’t like it either, because I pay it too. Doing what’s right for a community is not always doing what’s easy.”





What the towns will get

For 2009, COIT would provide each Madison County municipality with the following revenue amounts:



Alexandria $241,450

Anderson $2,637,575

Chesterfield $43,734

Country Club Heights $2,691

Edgewood $25,022

Elwood $368,216

Frankton $15,607

Ingalls $24,332

Lapel $58,310

Markleville $6,647

Orestes $6,647

Pendleton $80,171

River Forest $611

Summitville $20,173

Woodlawn Heights $3,006

Madison County $2,011,041